Christopher Langner is a markets columnist for Bloomberg Gadfly. He previously covered corporate finance for Bloomberg News, and has written for Reuters/IFR, Forbes, the Wall Street Journal and Mergermarket.

David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

Britain woke up on Thursday morning to downpours and disaster, with 4.4 centimeters of rain just outside Buckingham Palace and a swath of central London close to the Thames under flood alert.

In the early hours of Friday a vote to leave the European Union caused the pound to fall as much as 10.2 percent and spot gold to rise 5.9 percent.

Where can equity investors take shelter from this gathering storm? Well, George Soros and Kyle Bass will be disappointed to learn that China would have been their best bet.

While by noon in Hong Kong most markets that were trading showed losses ranging from 3 percent to 6 percent on Brexit, the Shanghai-Shenzhen CSI 300 was down about 1 percent, outperforming everything else that is considered a risky asset.

A Chinese Haven
With the BBC calling Brexit a certainty, China's CSI 300 index was outperforming its major peers in Asia
Source: Bloomberg

That shouldn't be a surprise. Unless a foreign fund has a qualified institutional investor quota from the China Securities Regulatory Commission, it can't trade the stocks in the Shanghai-Shenzhen index. Which means skittish portfolio managers can't freely pull out.

The Chinese blue-chip index, however, does run on its own agenda. A regression of weekly returns over the past 10 years for the 13 largest stock indexes in the world by market cap, plus Singapore's Straits Times Index, shows that the CSI 300 is the least correlated with the U.K.'s FTSE 100.

Seek Diversity in China
Over time, China's onshore market has been the least correlated with the U.K.'s FTSE 100
Source: Bloomberg

Similarly, the Chinese yuan is the steadiest currency in Asia today, if the yen is excluded. (The Japanese currency is seen as a haven and is rallying strongly.)

If Not Yen, Yuan
For an investor not positioned in yen, the best bet would have been the Chinese yuan
Source: Bloomberg

So the next time a major market dislocation seems imminent, don't listen to the China bears: The safest place to hide might be Shanghai.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the authors of this story:
Christopher Langner in Singapore at
David Fickling in Sydney at

To contact the editor responsible for this story:
Paul Sillitoe at